J.C. Penney CEO Ellison jumps ship to Lowe's
today May 23, 2018
J.C. Penney’sChief Executive Officer Marvin Ellison is leaving the struggling retailer to join home improvement chain Lowe’s Cos Inc, the companies said on Tuesday, sending shares in the U.S. department store chain down 4 percent.
Ellison came to Penney in 2014 with a strong reputation honed through 12 years at Lowe’s biggest competitor, Home Depot Inc, and shares in Lowe’s gained as much as 3 percent on the news of his appointment before retreating.
The 52-year-old will take over on July 2.
At J.C. Penney, Ellison was tasked with stemming a two-year long sales decline as the company struggles to stay relevant in a brutal U.S. retail landscape, where customers are increasingly turning to online shopping.
The chain has been among the hardest hit by a collapse in mall traffic, leading to the closure of thousands of U.S. stores in the past five years. JCP’s market value dwindled to $2.29 on Tuesday from $87 a share a decade ago.
Results last week showed J.C. Penney missed same-store sales estimates for the quarter ended May 5 and cut its full-year profit forecast because of changes to its accounting standards. Shares fell 12 percent on that day.
“Marvin Ellison’s departure from J.C. Penney is another signal to investors that the company is distressed,” said Jason Benowitz, a senior portfolio manager with fund managers The Roosevelt Investment Group in New York. “The captain is not going down with the ship but has chosen instead to save himself.”
The company said Ellison would stay on until June 1, but will step down as chairman of the board immediately.
After that a group of four executives including chief financial officer Jeff Davis will take over day-to-day running until a new CEO is appointed.
Lowe’s has also been losing market share with same-store sales lagging Home Depot for many years.
“I believe we (Lowe’s) will not just compete, but win in today’s complex retail environment,” Ellison said in a statement.
“Together, we will leverage Lowe’s omni-channel capabilities to deliver the most simple and seamless customer experiences.”
Lowe’s previous chief Robert Niblock said in March he would retire after 13 years in the job.
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